The RTÉ Investigations Unit has revealed how mortgages offered in Ireland by a sub-prime mortgage company were funded by the proceeds of one of Britain’s largest ever tax frauds.
The Home Funding Corporation Ltd offered the loans as part of a complex web that availed of legal loopholes and lax regulation in Ireland to launder the proceeds.
Due to these loopholes, borrowers were not able to avail of standard consumer protection measures.
The company mainly targeted cash-strapped farmers with poor credit ratings, offering them quick loans at very high interest rates using land as security.
Penalty interest rates were applied when payments were missed, turning relatively small loans into enormous debts.
Because an asset was put up as a security, HFC was exempt from restrictions imposed on money lenders and could charge whatever interest it liked.
Approximately 150 borrowers were charged interest rates of up to 28%.
One borrower signed up for a loan of £40,000 in 1997 which now stands at €1.4 million.
One missed payment meant that penalty rates were applicable, meaning that five years later repayments were ten times what they were on day one.
Seventeen years after the £40,000 was first drawn down, court proceedings remain ongoing, with the mortgage clocking up interest at a rate of €28,000 per month.
Another borrower who borrowed the equivalent of €25,000 in 1998 had paid back €27,000 by 2003 when she missed a payment for the first time.
When she attempted to settle the debt she learned she would have to hand over €35,000 in a lump sum or the demands would continue to grow.
The company is currently seeking to repossess more than 30 homes through the High Court and Circuit courts, with ten dormant cases reactivated since 2013.
The report also revealed that the man who set up the money laundering operation, still stands to benefit from the repossession of Irish homes.
HFC was sold to a newly formed English company called City Corporation Ltd, which Ian Andrews - the man who founded HFC - provided consultation services to.
Mr Andrews was previously known as Ian Leaf before changing his name in 2009.
In a letter to RTÉ, Mr Andrews said he set up HFC and controlled it until 2004.
He said the company was not funded from the proceeds of crime.
He denied that he ever owned or controlled City Corporation Ltd. He said the shares are currently owned by another man, who he has been in business with for 30 years.
He said: "The CPS consented to terminating the confiscation and restraint orders, effectively confirming I do not own any of these companies".
He declined a request for an interview.